Government intervention in commodity markets: The case of Japanese rice and wheat policy

A conceptual model of the Japaneserice and wheat economy that incorporates government behavior is specified and fit to data from the period 1960-1981. A unique feature of the model is the postulate that the Japanese government chooses the level of policy instruments that directly affect the rice and wheat economy as though it sougth to maximize a utility function whose arguments are the welfare of consumers and producers of rice and wheat and the government's net treasury position resulting from intervention. The government's decision rules are derived for each of the seven policy instruments, four for rice and three for wheat. The equations are fit to data along with the equations for rice and wheat demand and supply.